What does general liability insurance cover?
If you’re sorting out your business insurance, you need to be confident that you have the right kind of cover. But with so many different types of policies, it can be hard to work out what you need and why. General liability may be one form of insurance you are considering.
What is general liability insurance?
General liability is typically an American expression. In the UK we tend to call it ‘business liability insurance’ or ‘public and product liability’.
This type of insurance policy is designed to protect you and your business from claims made against you by members of the public or clients. You may sometimes hear it referred to as ‘contractors' liability’ or ‘business liability insurance’.
Does general liability insurance include employers’ liability?
General liability insurance cover is not normally a type of UK insurance, but the terms ‘business liability’ or ‘contractors' liability are sometimes used to refer to a bundle of different insurance policies. You should always check to see what is included.
What sorts of things do public and product liability insurance cover?
Public and product liability insurance will cover claims made against you or your business for injury or illness caused to someone or damage done to property.
For example, you would be covered if a member of the public walking near your building site tripped over materials left in their way and fractured an ankle. You’re also covered for damage to property, such as a paint spill.
If the damage or injury caused is found to be your fault, you or your business will usually have to pay compensation, damages, and legal fees. This is what your insurance is designed to cover.
Do I need this type of insurance?
If your business comes into contact with members of the public or clients, then public liability insurance can provide insurance protection (even though it is not a legal requirement). You may find some clients also insist you have it as a term of your contract.
You may need product liability insurance if you sell, supply, manufacture or install products. These could be electrical or domestic appliances.
You will need employers’ liability insurance if your business employs anyone, even if it’s only one person, or they are a trainee or volunteer. It is a legal requirement to have this.
Employers’ liability insurance covers you if an employee is injured or develops an illness as a result of working for you. You can be fined £2,500 for every day that you don’t have it.
How much cover do I need?
This will depend on several factors. Normal starting points for cover range from £1 million up to £10 million.
Large or public sector organisations will require you to have a certain level of cover.
Other relevant factors include:
- the type of work you do
- the value of the projects you work on
- the area(s) where you work
- the size and nature of your business
You can obtain a policy quote by applying online with a reputable construction insurance company.